A high school student can normally expect to begin receiving offers for student loans. While you may find that exciting, beware. But, you need to tread carefully as you explore student loan options.
There are two steps to approach the process of paying off student loans you have taken out. Make sure you pay the minimum amount due each month. After this, you will want to pay anything additional to the loan with the highest interest. That way, you will end up spending a lesser amount overall.
Focus initially on the high interest loans. If you think you will be better off paying the one with the highest monthly payments first, you may be wrong. Best to look at the interest rates.
Loans Offer
Pick out a payment option that you know can meet the needs you have. Many loans offer a decade-long payment term. There are other options if you can’t do this. For instance, you could be given more time but have to pay more interest. Additionally, some loans offer a slightly different payment plan that allows you to pay a certain percent of your income towards your debt. Some balances on student loans are forgiven after a period of 25 years.
Choose the payment option that is best suited to your needs. Most lenders allow ten years to pay back your student loan in full. If this does not appear to be feasible, you can search for alternative options. It is sometimes possible to extend the payment period at a higher interest rate. Therefore, you should pay it once you make money. On occasion, some lenders will forgive loans that have gone unpaid for decades.
Pay off your biggest loan as soon as you can to reduce your total debt. You will reduce the amount of interest that you owe. Pay the larger loans off to prevent this from happening. After you’ve paid your largest loan off in full, take the money that was previously needed for that payment and use it to pay off other loans that are next in line. When you make minimum payments against all your loans and pay as much as possible on the largest one, you can eventually eliminate all your student debt.
You may feel overburdened by your student loan payment on top of the bills you pay simply to survive. There are rewards programs that can help. Look at websites such as SmarterBucks and LoanLink to learn about this kind of program offered by Upromise. The are akin to cash back incentives, and the money spent works like a reward you can use toward your loan balance.
Take a large amount of credit hours to maximize your loan. The more credits you get, the faster you will graduate. This will help in reducing your loan significantly.
The simplest loans to obtain are the Stafford and Perkins. They are cheap and safe. They are great because while you are in school, your interest is paid by the government. Perkins loans have an interest rate of 5%. The interest is less than 6.8 percent on any subsidized Stafford loans.
If you don’t have very good credit and need a student loan, chances are that you’ll need a co-signer. Make sure you keep every payment. Otherwise, the other party must do so in order to maintain their good credit.
If you want to stretch out your student loans a little farther, get a meal plan which deals in terms of meals instead of dollar amounts. This allows you to not worry about what’s on your plate each time you eat because each meal is a flat rate.
Stay in contact with your lender. This is important because you should know everything about your loan including what is stipulated by your repayment plan. Your lender may also be able to provide you with valuable tips for repayment.
Starting college means making important decisions, but none are quite as important as thinking about the debt you are about to take on. When you borrow more than you need, or accept too high an interest rate, you may end up in trouble. Apply these tips when you apply for a loan in the future.
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